The Europe of past centuries knew all about cementing alliances. Royalty and nobility married their children into one another’s families. Love had little to do with it compared to the political challenges and the future of peoples who were all too often at war. The goal was peace: durable, fruitful peace between heretofore enemies. Sometimes it worked. Sometimes it didn’t.
Politics and industry no longer trade off their children and alliances are no longer made in the bedroom. But marriages between competitors of yesterday remain a serious romantic challenge for the newly-weds. Take a look at Total – Elf, Alstom and General Electric, Lafarge – Holcim, Arcelor – Mittal, and soon Areva and EDF. These and many others have hoped for or been forced to celebrate sometimes bitter-tasting nuptials. Happily, most of the time the relationships last.
But at the start of the journey everyone has one important question in mind:
But the times have changed:
Will yesterday’s enemies manage to make peace some day and work together instead of gleefully tearing each other apart.
Jack Welsh, the all-time king of marriage-makers, used to say “When culture and strategy clash, culture always wins.” That’s worth thinking about. Can we really imagine that totally irrational reasons for not “making something work together” will prevail over rational reasons to do so? It is, of course, daunting to bring two tribes together. Will shareholders get their return on investment? Will employees find their well being once again? Will clients keep getting the quality, product and services they expect? Or will culture really be the killjoy of that perfect Powerpoint presentation?
We’ve been working on post-merger integration plans for years. There’s nothing all that new about how to do that any more. But during the course of all these projects we’ve developed some views we’d like to share with you about what’s specific about when the two companies who are merging have traditionally been enemies.
Drop that line about a “marriage of equals”
It’s never a marriage of equals and that line only creates victims and disillusionment. One of the two organizations is always at least a bit more equal than the other. If the marriage is sought after by one group, it’s often feared by the other. And the bigger party isn’t necessarily the stronger one either. Aventis was worth twice Sanofi when Jean-François Dehecq went after them. But the message was clear: Sanofi will be in the driver’s seat. Being clear lets people know where they stand. They can accept it or reject it or think about other options. It’s never a good idea to resist from the inside and committing to a new organization is not treason. There’s a new project here. So why not get on board?
Anticipate the clash and culture change
Culture isn’t some pretty intellectual talk.
A company’s culture develops throughout its history. It builds on the values of the founders and of those who’ve built it. It develops on the corporate battlefield, through the victories and defeats that mark the corporate journey. So how do you get armies who’ve been fighting one another for years—and for whom the victory of one has been the defeat of the other—to line up together against new, common enemies and cooperate? How do you create the common glue that will make this happen?
A cultural diagnostic, such as our CBF© (Culture Bridging Fundamentals), is clarifying and valuable for just this purpose. It will allow you to:
- Identify the most meaningful cultural gaps between the two organizations as well as the most robust common factors upon which you can build sustainable cooperation;
- Ensure your communications respond to the cultural needs of both parties and are understandable and meaningful for all;
- Define the basics on which you can build your new culture, which will be owned by the combined management of the two enterprises.
Acknowledge and manage emotions
Culture is about people and all groups guard their history jealously. Then there’s a merger. Sure, merging is a technical business (project, strategies, organization, markets, products, clients). But it’s also a political affair (governance, decision-making, authority, roles, nominations). And beyond that, it’s a cultural and emotional challenge (values, beliefs and convictions, national knee-jerk reactions, business cultures, histories). If you forget about any of these components you weaken the entire process. You need clarity at every level.
That’s because nothing will be like it was before. You can clarify the regrets, the sources of pride, the hopes and the fears those who will live through the merger feel by organizing a series of focus groups with people from both sides. We call this diagnostic an EMOTIONAL SWOT © and it provides insights into what it will take to ensure support of the technical aspects of the merger by the most committed players while engaging those who are more reticent. The goal is to accelerate the integration process and not let negative energies take hold.
Build on the symbolic strength of leaders
Leaders are always exemplary—for the worst as well as for the best. In particular in the heavily charged times of post-merger integration, their every move is scrutinized and will affect the attitudes and behaviors of those around them. Here’s an example. When Charles de Gaulle invited Konrad Adenauer to France thirteen years after the end of WWII, he invited him to his home in Colombey les Deux Eglises. Madame de Gaulle, somewhat taken aback by this, told him: “We’ll use our every-day dishes.” Upon leaving Colombey, a visibly moved Adenauer said, “You made me feel at home“. That’s leadership and the vision of a new world that could be built together took root within the warmth of a family and a home. Perhaps the tiny start to the technical integration of Europe, but embodied by leaders at the cultural and emotional level.
Many mergers, no matter how technically justified, fail when the battle of egos kicks off within the leadership body, spreading rapidly through the organization. The arrogance of the buyer only fuels the skepticism of the company they have taken over.
We’ve facilitated many meetings between yesterday’s enemies, often in well-appointed chateaux. We’ve seen how a team can coalesce around the technical aspects and rationale of a merger. More ambitiously, we’ve seen the teams that start building a common culture and developing a code of conduct and behaviors they can all buy-into. This breathes life and energy into the merger at the highest level and from then on, engages teams everywhere.
Advocate mindfulness and tolerance. Your return will be manifold.
Since its beginnings ICM has accompanied organizations and teams as they make their way through difficult moments of this kind. We have developed tools and methodologies that facilitate integration and the culture change it entails.
Marry the enemies of yesteryear and watch the family grow: who could ask for anything more?!